The Federal Reserve, last week, seemingly surprised no one and everyone at the same time. On the one hand, the Fed backed off its Dec projection that it would raise short term rates 4 times this year. Now, they project 2 increases, which was the consensus of most analysts. No surprise here, but on the other hand, the Fed’s post-meeting commentary did surprise markets by acknowledging significant risks to continued economic strength. Markets have been in glass-half-full mode for the last month, mostly ignoring still-mixed economic reports.

The result was a small relaxation of interest rates. Now, we seem to be drifting again. I don’t see any real momentum for rates to move lower or higher at the moment, and it may stay that way until at least the next jobs report.

Or … keep your eye on inflation data. Remember that inflation is the enemy of low interest rates, and consumer inflation has been creeping up recently. I wouldn’t call it a trend yet, and wage inflation still seems negligible, but a couple more rising data points could spook rates higher.